<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
COMPUCOM SYSTEMS, INC.
401(K) MATCHED SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
COMPUCOM SYSTEMS, INC.
7171 FOREST LANE
DALLAS, TEXAS 75230
Registrant's telephone number, including area code (972) 856-3600
<PAGE>
SIGNATURE
- ---------
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator of CompuCom Systems, Inc. 401(k) Matched Savings Plan has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Date: June 30, 1998 By: /s/ M. Lazane Smith
------------------------------
M. Lazane Smith
Senior Vice President-Finance
Chief Financial Officer
<PAGE>
COMPUCOM SYSTEMS, INC.
401(K) MATCHED SAVINGS PLAN
Financial Statements
and Supplemental Schedules
December 31, 1997 and 1996
(With Independent Auditors' Report Thereon)
<PAGE>
COMPUCOM SYSTEMS, INC.
401(K) MATCHED SAVINGS PLAN
Table of Contents
-----------------
Independent Auditors' Report
Statement of Net Assets Available for Benefits as of
December 31, 1997
Statement of Net Assets Available for Benefits as of
December 31, 1996
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 1997
Statement of Changes in Net Assets Available for Benefits
for the year ended December 31, 1996
Notes to Financial Statements
Schedule
--------
Item 27a - Schedule of Assets Held for Investment Purposes as of
December 31, 1997 I
Item 27d - Schedule of Reportable Transactions for the year ended
December 31, 1997 II
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
The Participants and Plan Administrator
CompuCom Systems, Inc. 401(k) Matched Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of CompuCom Systems, Inc. 401(k) Matched Savings Plan as of December 31, 1997
and 1996, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of CompuCom
Systems, Inc. 401(k) Matched Savings Plan as of December 31, 1997 and 1996, and
the changes in net assets available for benefits for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The Fund Information in
the statements of net assets available for benefits and the statements of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for benefits
and changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
KPMG Peat Marwick LLP
Dallas, Texas
May 1, 1998
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Statement of Net Assets Available for Benefits
December 31, 1997
<TABLE>
<CAPTION>
Fidelity
CompuCom Fidelity Fidelity Fidelity U.S. Growth
Stock Magellan Puritan Equity Company
Fund Fund Fund Index Fund Fund
---------- --------- --------- ------------- --------
<S> <C> <C> <C> <C> <C>
Assets:
Investments (note 3):
CompuCom Systems, Inc. common stock,
at fair value (724,925 shares; cost
of $4,359,863) $5,980,631 - - - -
Fidelity Magellan Fund, at fair value
(87,363 units; cost of $7,469,318) - 8,323,079 - - -
Fidelity Puritan Fund, at fair value
(304,220 units; cost of $5,448,512) - 5,895,790 - -
Fidelity U.S. Equity Index fund,
at fair value (97,859 units; cost
of $2,826,032) - - - 3,423,107 -
Fidelity Growth Company Fund, at
fair value (30,374 units; cost of
$822,214) - - - - 721,391
Fidelity Short-Intermediate Government
Fund, at fair value (86,388 units;
cost of $833,706) - - - - -
Fidelity Broadly Diversified
International Equity Fund, at fair
value (21,601 units; cost of $355,063) - - - - -
Fidelity Retirement Money Market Fund,
at fair value (1,984,973 units; cost
of $1,984,973) - - - - -
Participant loans (unpaid principal
balance approximates fair value) - - - - -
---------- --------- --------- --------- -------
Total investments 5,980,631 8,323,079 5,895,790 3,423,107 721,391
Cash 141,199 - - - -
---------- --------- --------- --------- -------
6,121,830 8,323,079 5,895,790 3,423,107 721,391
Receivables:
Employer's contributions 296,213 422,355 303,730 303,730 67,573
Employees' contributions 38,408 56,977 39,193 41,911 12,888
---------- --------- --------- --------- -------
Total assets 6,456,451 8,802,411 6,238,713 3,768,748 801,852
Refunds payable (39,276) (61,072) (42,742) (30,146) (3,188)
---------- --------- --------- --------- -------
Net assets available for benefits $6,417,175 8,741,339 6,195,971 3,738,602 798,664
========== ========= ========= ========= =======
<CAPTION>
Fidelity Fidelity Fidelity
Short- Broadly Retirement
Intermediate Diversified Money
Government International Market Participant
Fund Equity Fund Fund Loans Totals
------------ ------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments (note 3):
CompuCom Systems, Inc. common stock,
at fair value (724,925 shares; cost
of $4,359,863) - - - - 5,980,631
Fidelity Magellan Fund, at fair value
(87,363 units; cost of $7,469,318) - - - - 8,323,079
Fidelity Puritan Fund, at fair value
(304,220 units; cost of $5,448,512) - - - - 5,895,790
Fidelity U.S. Equity Index fund,
at fair value (97,859 units; cost
of $2,826,032) - - - - 3,423,107
Fidelity Growth Company Fund, at
fair value (30,374 units; cost of
$822,214) - - - - 721,391
Fidelity Short-Intermediate Government
Fund, at fair value (86,388 units;
cost of $833,706) 856,101 - - - 856,101
Fidelity Broadly Diversified
International Equity Fund, at fair
value (21,601 units; cost of $355,063) - 348,431 - - 348,431
Fidelity Retirement Money Market Fund,
at fair value (1,984,973 units; cost
of $1,984,973) - - 1,948,973 - 1,984,973
Participant loans (unpaid principal
balance approximates fair value) - - - 1,021,838 1,021,838
------- ------- --------- --------- ----------
Total investments 856,101 348,431 1,984,973 1,021,838 28,555,341
Cash - - - - 141,199
------- ------- --------- --------- ----------
856,101 348,431 1,984,973 1,021,838 28,696,540
Receivables:
Employer's contributions 83,335 34,174 154,313 - 1,665,423
Employees' contributions 10,353 6,704 17,834 - 224,268
------- ------- --------- --------- ----------
Total assets 949,789 389,309 2,157,120 1,021,838 30,586,231
Refunds payable (9,277) (2,038) (10,250) - (197,989)
------- ------- --------- --------- ----------
Net assets available for benefits 940,512 387,271 2,146,870 1,021,838 30,388,242
======= ======= ========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Statement of Net Assets Available for Benefits
December 31, 1996
<TABLE>
<CAPTION>
Fidelity
CompuCom Fidelity Fidelity Fidelity U.S. Growth
Stock Magellan Puritan Equity Company
Fund Fund Fund Index Fund Fund
------------ --------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Assets:
Investments (note 3):
CompuCom Systems, Inc. common stock,
at fair value (730,713 shares; cost
of $4,022,337) $7,939,101 - - - -
Fidelity Magellan Fund, at fair value
(75,374 units; cost of $6,170,928) - 6,078,907 - - -
Fidelity Puritan Fund, at fair value
(254,442 units; cost of $4,416,727) - - 4,386,580 - -
Fidelity U.S. Equity Index fund, at
fair value (51,230 units; cost of
$1,266,688) - - - 1,380,655 -
Fidelity Short-Intermediate Government
Fund, at fair value (54,818 units;
cost of $526,869) - - - - -
Fidelity Retirement Money Market Fund,
at fair value (1,660,298 units; cost
of $1,660,298) - - - - -
Participant loans (unpaid principal
balance approximates fair value) - - - - -
---------- --------- --------- --------- ------
Total investments 7,939,101 6,078,907 4,386,580 1,380,655 -
Cash 170,772 - - - -
---------- --------- --------- --------- ------
8,109,873 6,078,907 4,386,580 1,380,655 -
Receivables:
Employer's contributions 294,020 357,676 252,642 201,453 16,091
Employees' contributions 73,589 56,346 40,660 12,797 -
---------- --------- --------- --------- ------
Total assets 8,477,482 6,492,929 4,679,882 1,594,905 16,091
Refunds payable (62,398) (75,668) (50,406) (30,788) (2,532)
---------- --------- --------- --------- ------
Net assets available for benefits $8,415,084 6,417,261 4,629,476 1,564,117 13,559
========== ========= ========= ========= ======
<CAPTION>
Fidelity Fidelity Fidelity
Short-, Broadly Retirement
Intermediate Diversified Money
Government International Market Participant
Fund Equity Fund Fund Loans Totals
------------ ------------- ---------- ----------- ------
<S> <C> <C> <C> <C> <C>
Assets:
Investments (note 3):
CompuCom Systems, Inc. common stock,
at fair value (730,713 shares; cost
of $4,022,337) - - - - 7,939,101
Fidelity Magellan Fund, at fair value
(75,374 units; cost of $6,170,928) - - - - 6,078,907
Fidelity Puritan Fund, at fair value
(254,442 units; cost of $4,416,727) - - - - 4,386,580
Fidelity U.S. Equity Index fund, at
fair value (51,230 units; cost of
$1,266,688) - - - - 1,380,655
Fidelity Short-Intermediate Government
Fund, at fair value (54,818 units;
cost of $526,869) 531,182 - - - 531,182
Fidelity Retirement Money Market Fund,
at fair value (1,660,298 units; cost
of $1,660,298) - - 1,660,298 - 1,660,298
Participant loans (unpaid principal
balance approximates fair value) - - - 779,721 779,721
------- ----- --------- ------- ----------
Total investments 531,182 - 1,660,298 779,721 22,756,444
Cash - - - - 170,772
------- ----- --------- ------- ----------
531,182 - 1,660,298 779,721 22,927,216
Receivables:
Employer's contributions 69,544 9,621 193,754 - 1,394,801
Employees' contributions 4,924 - 15,389 - 203,705
------- ----- --------- ------- ----------
Total assets 605,650 9,621 1,869,441 779,721 24,525,722
Refunds payable (4,110) (736) (29,883) - (256,521)
------- ----- --------- ------- ----------
Net assets available for benefits 601,540 8,885 1,839,558 779,721 24,269,201
======= ===== ========= ======= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1997
<TABLE>
<CAPTION>
Fidelity
CompuCom Fidelity Fidelity Fidelity U.S. Growth
Stock Magellan Puritan Equity Company
Fund Fund Fund Index Fund Fund
----------- ---------- --------- ------------- --------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employer's contributions $ 296,213 422,355 303,730 303,730 67,573
Employees' contributions 1,200,350 1,872,100 1,282,285 1,310,251 327,781
Investment income:
Interest and dividends 21,188 547,247 490,309 73,394 137,621
Net appreciation (depreciation) in
fair value of investments (1,529,667) 1,173,999 572,005 583,342 (93,879)
----------- ---------- --------- --------- -------
Net investment income (1,508,479) 1,721,246 1,062,314 656,736 43,742
----------- ---------- --------- --------- -------
Total additions (11,916) 4,015,701 2,648,329 2,270,717 439,096
Deductions from net assets attributed to:
Administrative fees (1,388) (2,325) (5,681) (1,963) (644)
Withdrawals (948,237) (1,709,409) (941,808) (438,402) (18,426)
----------- ---------- --------- --------- -------
Total deductions (949,625) (1,711,734) (947,489) (440,365) (19,070)
----------- ---------- --------- --------- -------
Net increase (decrease) prior to
interfund transfers (961,541) 2,303,967 1,700,840 1,830,352 420,026
Interfund transfers (1,036,368) 20,111 (134,345) 344,133 365,079
----------- ---------- --------- --------- -------
Net increase (decrease) (1,997,909) 2,324,078 1,566,495 2,174,485 785,105
Net assets available for benefits:
Beginning of year 8,415,084 6,417,261 4,629,476 1,564,117 13,559
----------- ---------- --------- --------- -------
End of year $ 6,417,175 8,741,339 6,195,971 3,738,602 798,664
=========== ========== ========= ========= =======
<CAPTION>
Fidelity Fidelity Fidelity
Short- Broadly Retirement
Intermediate Diversified Money
Government International Market Participant
Fund Equity Fund Fund Loans Totals
------------ ------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employer's contributions 83,335 34,174 154,313 - 1,665,423
Employees' contributions 347,479 161,775 744,238 - 7,246,259
Investment income:
Interest and dividends 49,260 13,429 113,799 - 1,446,247
Net appreciation (depreciation) in
fair value of investments 19,117 (6,560) - - 718,357
-------- ------- --------- --------- ----------
Net investment income 68,377 6,869 113,799 - 2,164,604
-------- ------- --------- --------- ----------
Total additions 499,191 202,818 1,012,350 - 11,076,286
Deductions from net assets attributed to:
Administrative fees (1,606) - (5,263) - (18,870)
Withdrawals (116,722) (16,763) (580,722) (167,886) (4,938,375)
-------- ------- --------- --------- ----------
Total deductions (118,328) (16,763) (585,985) (167,886) (4,957,245)
-------- ------- --------- --------- ----------
Net increase (decrease) prior to
interfund transfers 380,863 186,055 426,365 (167,886) 6,119,041
Interfund transfers (41,891) 192,331 (119,053) 410,003 -
-------- ------- --------- --------- ----------
Net increase (decrease) 338,972 378,386 307,312 242,117 6,119,041
Net assets available for benefits:
Beginning of year 601,540 8,885 1,839,558 779,721 24,269,201
-------- ------- --------- --------- ----------
End of year 940,512 387,271 2,146,870 1,021,838 30,388,242
======== ======= ========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1996
<TABLE>
<CAPTION>
Guaranteed CompuCom Fidelity Fidelity Scudder Fidelity U.S.
Long-term Stock Magellan Puritan International Equity
Fund Fund Fund Fund Bond Fund Index Fund
----------- ---------- --------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employer's contributions $ - 294,020 357,676 252,642 - 201,453
Employees' contributions 154,312 1,104,190 1,702,302 1,069,356 49,881 656,086
Investment income:
Interest and dividends 72,910 - 790,630 495,933 - 22,738
Net appreciation (depreciation) in
fair value of investments - 1,004,702 (145,687) 94,694 (4,762) 118,508
----------- ---------- --------- --------- -------- ---------
Net investment income 72,910 1,004,702 644,943 590,627 (4,762) 141,246
----------- ---------- --------- --------- -------- ---------
Total additions 227,222 2,402,912 2,704,921 1,912,625 45,119 998,785
Deductions from net assets attributed to:
Administrative fees - (1,119) (1,262) (1,706) - (156)
Withdrawals (182,540) (1,157,194) (872,741) (692,721) (19,747) (52,296)
----------- ---------- --------- --------- -------- ---------
Total deductions (182,540) (1,158,313) (874,003) (694,427) (19,747) (52,452)
----------- ---------- --------- --------- -------- ---------
Net increase prior to interfund
transfers 44,682 1,244,599 1,830,918 1,218,198 25,372 946,333
Interfund transfers (3,401,418) 995,520 (65,722) 244,720 (390,518) 617,784
----------- ---------- --------- --------- -------- ---------
Net increase (decrease) (3,356,736) 2,240,119 1,765,196 1,462,918 (365,146) 1,564,117
Net assets available for benefits:
Beginning of year 3,356,736 6,174,965 4,652,065 3,166,558 365,146 -
----------- ---------- --------- --------- -------- ---------
End of year $ - 8,415,084 6,417,261 4,629,476 - 1,564,117
=========== ========== ========= ========= ======== =========
<CAPTION>
Fidelity Fidelity Fidelity
Fidelity Short- Broadly Retirement
Growth Intermediate Diversified Money
Company Government International Market Participant
Fund Fund Equity Fund Fund Loans Totals
-------- ------------ ------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Employer's contributions 13,559 69,544 8,885 193,754 - 1,391,533
Employees' contributions - 209,802 - 659,962 - 5,605,891
Investment income:
Interest and dividends - 21,465 - 59,315 4,706 1,467,697
Net appreciation (depreciation) in
fair value of investments - 347 - - - 1,067,802
------ ------- ----- --------- ------- ----------
Net investment income - 21,812 - 59,315 4,706 2,535,499
------ ------- ----- --------- ------- ----------
Total additions 13,559 301,158 8,885 913,031 4,706 9,532,923
Deductions from net assets attributed to:
Administrative fees - (856) - (2,256) - (7,355)
Withdrawals - (28,038) - (139,738) - (3,145,015)
------ ------- ----- --------- ------- ----------
Total deductions - (28,894) - (141,994) - (3,152,370)
------ ------- ----- --------- ------- ----------
Net increase prior to interfund
transfers 13,559 272,264 8,885 771,037 4,706 6,380,553
Interfund transfers - 329,276 - 1,068,521 601,837 -
------ ------- ----- --------- ------- ----------
Net increase (decrease) 13,559 601,540 8,885 1,839,558 606,543 6,380,553
Net assets available for benefits:
Beginning of year - - - - 173,178 17,888,648
------ ------- ----- --------- ------- ----------
End of year 13,559 601,540 8,885 1,839,558 779,721 24,269,201
====== ======= ===== ========= ======= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1) Summary of Significant Accounting Policies
------------------------------------------
The accompanying financial statements have been prepared on an accrual
basis using quoted market for determining fair value of investments. The
investments in mutual funds and common stock are stated at fair value and
are based on closing market quotations. The investment in participant loans
is stated at the unpaid principal balance of the loans, which approximates
fair value. Purchases and sales of securities are recorded on a trade date
basis. Expenses relating to the purchase or sale of investment securities
are added to the cost or deducted from the proceeds, respectively.
The net increase (decrease) in fair values of investments held during the
years ended December 31, 1997 and 1996 (including investments bought, sold,
as well as held during the year) is reflected in the statements of changes
in net assets available for benefits as net appreciation (depreciation) in
fair value of investments.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of additions and deductions
during the reporting period. Because of the use of estimates inherent in
the financial reporting process, actual results could differ from those
estimates.
(2) Description of the Plan
-----------------------
(a) General
-------
The CompuCom Systems, Inc. 401(k) Matched Savings Plan (the Plan) is a
defined contribution plan covering substantially all employees of
CompuCom Systems, Inc. ("CompuCom" or the "Company/Employer") who have
completed at least six months of qualifying service. The following
description of the Plan is provided for general informational purposes
only. Participants should refer to the Plan documents for more
complete information.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). The Plan is subject
to those provisions of Title I and II of ERISA which, among other
things, require that each participant be furnished with an annual
financial report and a comprehensive description of the participant's
rights under the Plan, set minimum standards of responsibility
applicable to fiduciaries of the Plan, and establish minimum standards
for participation and vesting.
(Continued)
<PAGE>
2
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
The Company serves as the Plan Administrator; however, the Plan
operates under a contract administration agreement, whereby an
independent third party Investment Firm assists the Company in this
capacity. The Investment Firm maintains a separate account for each
participant reflecting the participant's cost and market value of
investments. The Investment Firm also serves as the trustee and makes
distributions from a participant's account in accordance with the
terms of the Plan document. The Investment Firm of the Plan was
changed on May 1, 1996. In conjunction with the change in Investment
Firms effective May 1, 1996, the Plan agreement was restated. The
terms of the restated Plan agreement are substantially consistent with
the previous agreement. However, the restated Plan agreement allows
employees to participate in the Plan after six months of eligible
service. The previous Plan agreement required twelve months of
eligible service.
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of Plan termination, participants will become 100% vested in their
accounts.
(b) Vesting
-------
Participants are fully vested in their individual contributions to the
Plan. Prior to October 1, 1994 the Employer's matching contributions
vested 100% after two years of service. Beginning October 1, 1994, the
Employer's matching contributions vest 50% after two years of service
and 100% after three years of service. A year of service is a
consecutive 12 month period during which an employee has completed
1,000 hours of service.
(c) Contributions
-------------
The Company matches 50% of each participant's qualifying contribution
up to 4% of the participant's basic compensation. The Company also
matches an additional 25% on each participant's next 2% of (over and
beyond the first 4%) qualifying contributions. During 1997 and 1996,
the Company contributed $1,665,423 and $1,391,533, respectively, to
participants' accounts.
Contributions are invested in one or more investment funds, one of
which includes the Company's Common Stock. The funds allocated to a
participant's account are received by the Trustee in cash and are held
in cash until they are invested in the appropriate funds. At December
31, 1997 and 1996, the Plan had $141,199 and $170,772 in cash,
respectively.
(d) Participant's Accounts
----------------------
Each participant's account is credited with the participant's
contribution and allocations of the Company's contribution and Plan
earnings. Forfeited balances of terminated participants' nonvested
accounts are used to reduce future Company contributions. The
(Continued)
<PAGE>
3
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
(e) Withdrawals
-----------
Participants may request a withdrawal of all or a portion of their
elective contribution account balances if the withdrawal qualifies as
a "Financial Hardship" as defined by the Internal Revenue Service. The
Plan Administrator must approve the request and the hardship
withdrawal will be taxed to the participant as ordinary income and may
be subject to an additional government imposed penalty tax. Upon the
attainment of age 59-1/2, participants may withdraw without penalty
from their participant's account an amount which is equal to any whole
percentage of their vested interest.
(f) Loans to Participants
---------------------
Upon request of a participant, the Plan Administrator, in its sole
discretion, may make a loan to the participant. Participant loan
amounts may not exceed $50,000 or 50% of the participant's vested
account balance. The maximum term for any loan is five years. Loans
bear interest at rates determined by the Plan Administrator ranging
from 10.25% to 11.50% in 1997.
(g) Expenses of Plan
----------------
The expenses for administration of the Plan, including the expenses of
the administration and fees of the Trustee, shall be paid from the
Plan, unless CompuCom (the Sponsor) elects to make payment. The
Sponsor paid approximately $12,000 in fees relating to the Plan during
1997 and $48,000 in 1996.
(3) Investment Programs
-------------------
The Company's matching contributions to the Plan are invested in CompuCom's
common stock and investment funds in proportion to the participants'
contributions in connection with the matching provision of the Plan. Funds
from previous companies' plans and rollovers from qualified plans are
invested in the investment funds at the participants' direction. Provisions
of the Plan allow participant contributions in 1% increments to be invested
in any of the funds, including CompuCom common stock.
The investment programs of the Plan are as follows:
(a) CompuCom Stock Fund
-------------------
Contributions are invested in the Company's common stock. The Company
has entered into a contractual agreement for the purchase and
liquidation of shares of Employer stock.
(Continued)
<PAGE>
4
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
(b) Fidelity Magellan Fund
----------------------
Contributions are invested in a pooled fund of common stocks and
securities convertible to common stock. The performance of the fund is
related to market gains and losses. The return on this fund may be
higher or lower than the return of other funds.
(c) Fidelity Puritan Fund
---------------------
Contributions are invested in a pooled fund of a broad list of
securities, including common stocks, preferred stocks and bonds,
including high-yield, low-quality bonds. The value of this fund
depends on the performance of the stocks and bonds in which this fund
is invested. The return on this fund may be higher or lower than the
return of other funds.
(d) Fidelity U.S. Equity Index Fund
-------------------------------
Contributions are invested in a pooled fund of common stocks publicly
traded in the United States. The fund attempts to duplicate the
composition and return of the Standard & Poors 500. The performance of
the fund is related to market gains and losses. The return of this
fund may be higher or lower than the return of other funds.
(e) Fidelity Growth Company Fund
----------------------------
Contributions are invested in a pooled fund of common stocks and
securities convertible into common stock. The performance of the fund
is related to market gains and losses. The return on this fund may be
higher or lower than the return of other funds.
(f) Fidelity Short-Intermediate Government Fund
-------------------------------------------
Contributions are invested in a pooled fund of U.S. Government
securities and instruments related to U.S. Government securities. The
fund normally maintains a dollar weighted average maturity of two to
five years. The return on this fund may be higher or lower than the
return of other funds.
(g) Fidelity Broadly Diversified International Equity Fund
------------------------------------------------------
Contributions are invested in a pooled fund of securities of any
issuer, including companies and other business organizations as well
as governments and government agencies. The fund tends to focus on the
equity securities of both large and small companies. The performance
of the fund is related to market gains and losses. The return of this
fund may be higher or lower than the return of other funds.
(Continued)
<PAGE>
5
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
(h) Fidelity Retirement Money Market Fund
-------------------------------------
Contributions are invested in a pooled fund of high-quality U.S.
dollar denominated money market securities of domestic and foreign
issuers, including U.S. Government securities and repurchase
agreements.
The following table presents the fair values of investments that
represent 5% or more of the Plan's net assets available for benefits:
<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
----------------- -----------------
Units, shares Fair Units, shares Fair
Description or face value value or face value value
----------- ------------- ----- ------------- -----
<S> <C> <C> <C> <C>
CompuCom Systems,
Inc. common stock 724,925 $5,980,631 730,713 $7,939,101
Fidelity Magellan Fund 87,363 8,323,079 75,374 6,078,907
Fidelity Puritan Fund 304,220 5,895,790 254,442 4,386,580
Fidelity U.S. Equity Index
Fund 97,859 3,423,107 51,230 1,380,655
Fidelity Retirement Money
Market fund 1,894,973 1,894,973 1,660,298 1,660,298
</TABLE>
(4) Tax Status
----------
The Internal Revenue Service has determined and informed the Company by a
letter dated November 3, 1997 that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan
administrator and the Plan's tax counsel believe that the Plan is designed
and is currently being operated in compliance with the applicable
requirements of the IRC.
The federal income tax status of the participants with respect to their
contributions to the Plan is described in information submitted to the
participants and, subject to certain limitations, such contributions are
tax deferred.
(5) Refunds Payable
---------------
At December 31, 1997 and 1996, the Plan has recorded refunds payable of
$197,989 and $256,521, respectively. The refunds relate to amounts due to
certain employees of the Company based upon nondiscrimination tests for
deferrals and employee after-tax contributions to the Plan.
(Continued)
<PAGE>
6
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
(6) Plan Amendment
--------------
Effective January 1, 1998, the Plan was amended to eliminate the six months
of qualifying service eligibility requirement.
<PAGE>
Schedule I
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1997
<TABLE>
<CAPTION>
Identity of issue Description of investment Cost Current value
----------------- ------------------------- ---- -------------
<S> <C> <C> <C>
CompuCom Stock Fund:
CompuCom Systems, Inc.
common stock* 724,925 shares $ 4,359,863 5,980,631
Fidelity Magellan Fund 87,363 units 7,469,318 8,323,079
Fidelity Puritan Fund 304,220 units 5,448,512 5,895,790
Fidelity U.S. Equity Index Fund 97,859 units 2,826,032 3,423,107
Fidelity Growth Company Fund 30,374 units 822,214 721,391
Fidelity Short-Intermediate
Government Fund 86,388 units 833,706 856,101
Fidelity Broadly Diversified
International Equity Fund 21,601 units 355,063 348,431
Fidelity Retirement Money
Market Fund 1,984,973 units 1,984,973 1,984,973
Participant loans Loans to participants,
10.25% to 11.50 % 1,021,838 1,021,838
----------- ----------
$25,121,519 28,555,341
=========== ==========
</TABLE>
*Party-in-interest
See accompanying independent auditors' report.
<PAGE>
Schedule II
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Aggregate
Description number of Purchase Selling
Identity of party involved of transaction transactions price price
- -------------------------- -------------- ------------ -------- -------
<S> <C> <C> <C> <C>
Purchases:
Fidelity Short-
Intermediate
Government Fund U.S. securities fund 147 $ 762,242 -
Fidelity Magellan Fund Common stock fund 216 $3,956,313 -
Fidelity Puritan Fund Variable security fund 207 $2,545,227 -
Fidelity Growth
Company Fund Common stock fund 148 $ 981,519 -
Fidelity Retirement
Money Market Fund Money market fund 193 $2,082,395 -
Fidelity U.S. Equity
Index Fund Common stock fund 200 $2,358,595 -
Sales:
Fidelity Short-
Intermediate
Government Fund U.S. security fund 98 $ - 456,621
Fidelity Magellan Fund Common stock fund 162 $ - 2,886,141
Fidelity Puritan Fund Variable security fund 164 $ - 1,608,022
Fidelity Growth
Company Fund Common stock fund 47 $ - 166,248
Fidelity Retirement
Money Market Fund Money market fund 158 $ - 1,757,720
Fidelity U.S. Equity
Index Fund Common stock fund 128 $ - 899,486
<CAPTION>
Current
Expense value of
incurred asset on Net
Lease with Cost of transaction gain
Identity of party involved rental transaction asset date (loss)
- -------------------------- ------ ----------- ------- ----------- ------
<S> <C> <C> <C> <C> <C>
Purchases:
Fidelity Short-
Intermediate
Government Fund - - 762,242 762,242 -
Fidelity Magellan Fund - - 3,956,313 3,956,313 -
Fidelity Puritan Fund - - 2,545,227 2,545,227 -
Fidelity Growth
Company Fund - - 981,519 981,519 -
Fidelity Retirement
Money Market Fund - - 2,082,395 2,082,395 -
Fidelity U.S. Equity
Index Fund - - 2,358,595 2,358,595 -
Sales:
Fidelity Short-
Intermediate
Government Fund - - 455,587 456,621 1,034
Fidelity Magellan Fund - - 2,657,923 2,886,141 228,218
Fidelity Puritan Fund - - 1,512,441 1,608,022 95,581
Fidelity Growth
Company Fund - - 159,305 166,248 6,943
Fidelity Retirement
Money Market Fund - - 1,757,720 1,757,720 -
Fidelity U.S. Equity
Index Fund - - 799,251 899,486 100,235
</TABLE>
See accompanying independent auditors' report.
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors
CompuCom Systems, Inc.:
We consent to the incorporation by reference in Registration Statements (No. 33-
30056 No. 33-30175, No. 33-43275 and No. 33-76382) on Form S-8 of CompuCom
Systems, Inc. of our report dated May 1, 1998 relating to the statements of net
assets available for benefits of CompuCom Systems, Inc. 401(k) Matched Savings
Plan as of December 31, 1997 and 1996, and the related statements of changes in
net assets available for benefits for the years then ended, and the related
supplemental schedules, which report appears in the December 31, 1997 annual
report on Form 11-K of the CompuCom Systems, Inc. 401(k) Matched Savings Plan
filed by CompuCom Systems, Inc.
KPMG Peat Marwick LLP
Dallas, Texas
June 30, 1998
